SAN FRANCISCO (KCBS) — A deal was reached Wednesday to bring up and store Muni’s Central Subway machinery at a vacant theater, bringing much relief to North Beach residents concerned about the project’s impacts.

The San Francisco Municipal Transit Agency has agreed to a two-year lease with Joel Campos, the owner the Pagoda Palace. The vacant theater will be demolished and the site will be used to extract an store two tunnel boring machines used to dig out the Central Subway.

KCBS’ Chris Filippi Reports:

The SFMTA had initially planned to bring up the large machines on Columbus Avenue near Washington Park—a proposal that alarmed neighbors.

“Now we’re doing it just a few hundred feet away, but we’re doing it in a way that gets rid of a big chunk of the impact to the community,” SFMTA transportation director Ed Reiskin said.

The original plan would have included moving utilities and the construction of a huge “box” which would have required shutting down two lanes on Columbus Avenue over the course of nine months.

The lease will cost $3.15 million for two years. Construction costs, including tearing down the theater, could rise by $6 million.

“It’s a relativity small percentage of the project costs,” Reiskin said. “The project has pretty considerable contingency in it so we’re hopeful we’ll still be able to do this within the project budget.”

The plan still must be approved by the SFMTA’s board.

(Copyright 2012 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)